Two of the major questions Ron Paul had for the Federal Reserve chairman was if he believed that gold was money (Bernanke responded that he didn't think that it was), and the follow up question was "Then why do central banks have gold holdings?" Bernanke's response of "tradition" garnered a long list of pundits who lampooned him for it, but the comment has also served as the standard for how the Federal Reserve has handled precious metals: with a shrug, a sigh, and the same sort of confused look that one might get from Secretary of State John Kerry if one were to ask him about the fourth amendment.

Where this goes from being a foot note to a story, however, is in the way that the Fed has handled the gold holdings. During World War II, the Federal Reserve convinced many countries worldwide to secure their holdings within the United States for safety and as a result, over 7,000 tons of the precious metal has been received by the Fed, with over 98% of it being foreign owned. Fast forward to today: Germany made the decision to repatriate the gold it owned from the United States, only to be told by the Federal Reserve that it wasn't possible until 2020. After further pressure from Germany, the Fed would only open one out of nine rooms to the Germans and refused to allow them inside, only allowing them to look and not touch the inventory. Keep in mind, this is Germany's property - this would be like going to the bank and asking for your money and them telling you "Well, we'll show you a little bit of it...but you can't touch it or have any of it. For seven years."

This has led to concerns that perhaps all isn't as it appears. For decades, Ron Paul and others within Congress had attempted to push for an audit of the Fed with limited success; even the audit that occurred last year wasn't a full one. Most importantly, the gold holdings of the Fed weren't a part of the audit, leaving many wondering if the gold even exists or if the Fed used it as collateral on other deals. Adding in the behavior of the Federal Reserve in regards to Germany's request for repatriation has left many people in the international community feeling uneasy. In the event of an emergency, if the Federal Reserve is unwilling to allow repatriation, what options are available to the original owner of the gold? War is highly unlikely while asking for sanctions to be imposed on the owner of one of the reserve currencies is also highly unlikely to produce any sort of results. The end result of this, ultimately, is both fears of the gold being absent or confiscated by the Federal Reserve and further generation of mistrust in the Fed by both the international community and those at home who are keeping track of the direction of the economy under Ben Bernanke's tenure.So what does all this mean? For the international community still reeling from Edward Snowden's revelations and the continued influence of the United States in situations such as Syria, particularly the sponsoring of the very group that they claimed to be hunting to the ends of the Earth, it creates a sense of tension. For those here in the United States watching the situation, it serves as another warning: if the Federal Reserve can turn away legal repatriation from an allied nation, why would that same government have any incentive to respect the properties of a group of people that can't do anything in response?

This is why I have advocated for the personal ownership of hard assets such as rare coins and precious metals for years. Ownership of ETFs and paper contracts "claiming" you have a stake in something are an unfortunately easy way to get hit with the nasty reality of fractional reserve banking: just because they say you own it doesn't make it so. This is why I believe so firmly in owning tangible hard assets that you hold and store personally - so that in the event of a personal emergency, all you have to do is walk down the hall, and more importantly, in the event of a national emergency, you're not relying on others to give you access to what you've bought with your hard earned money. Protect yourself with rare coins and precious metals, because you can't protect yourself with the monetary policies that have been set up by the Federal Reserve. Just ask Germany.